Steven A. Cook

From the Potomac to the Euphrates

Cook examines developments in the Middle East and their resonance in Washington.

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What the United States Can Do for Egypt Right Now

by Steven A. Cook
May 23, 2013

A worker sits amongst bags of Flour at a warehouse in a grain market in Cairo (Nasser Nuri/Courtesy Reuters). A worker sits amongst bags of Flour at a warehouse in a grain market in Cairo (Nasser Nuri/Courtesy Reuters).

“How can the United States help Egypt?” is a common question heard around the Beltway these days.  There are lots of good ideas, but too often they do not address the country’s immediate and most pressing needs.  It should be clear  that Washington is not going to fix Egypt’s political problems no matter how many times people say, “we need to get Egypt right.”  That complex and difficult task is up to the Egyptians—though there are a few discrete policies that Washington can pursue that might be helpful.  All that said, here are four initiatives the United States can undertake that can make a difference in Egypt over the next 3 to 6 to 12 months:

1.       The United States, European Union, and Asian allies should pool resources and provide loan guarantees for Egypt.  Loan guarantees offer two primary benefits to donors and recipients.  They are  an effective way of leveraging large amounts of money with a limited commitment of resources—unless Egypt defaults—and it allows Cairo to borrow on commercial markets at significantly lower interest rates than a country with a CCC+ rating, such as Egypt, would otherwise obtain. They also leave the decision to use the loan guarantees up to the Egyptians, which is consistent with a central theme of the January 25th uprising—national empowerment and dignity.  Still, there is no getting around the asymmetry of power between the United States-led consortium of loan guarantors and Egypt.  Recognizing the sensitivity of the terms “conditionality,” “conditions,” and “condition”, there would need to be a prior agreement with Cairo that the loans would be used for Egypt’s greatest needs, specifically food, fuel, and medicine.

As Egypt’s financial crisis has deepened over the last two years, observers have called for greater U.S. coordination of financial assistance with wealthy Arab states.  This is a mistake, as it further entangles Egypt in the poisonous rivalries of the Gulf states.  The idea also presupposes that Qatar, Saudi Arabia, and the United Arab Emirates share U.S. or each others’ goals in Egypt.  Instead, the Qataris are seeking to buy regional influence, the Saudis neither want Egypt to succeed nor fail, and the Emiratis want to undermine the Muslim Brotherhood.   In the abstract, undermining the Brotherhood is not a bad outcome, but the clear costs of the policy are likely great and the benefits decidedly uncertain.  The result would not necessarily be the emergence of a liberal democratic polity, but rather a narrower dictatorship or more instability, violence, and uncertainty.  Does anyone seriously believe that the Brothers are going to give it all up so easily?

2.       Food aid to Egypt ended in 1992; it should be started again. As the largest importer of wheat in the world, Egypt is particularly sensitive to changes in the global price of wheat. Indeed, between 2009 and 2011, food insecurity in Egypt increased by three percent.

3.       The United States should continue to backstop Egypt’s public health system through additional investment in NAMRU (Navy Medical Research Unit) 3, which is based in Cairo, though it is responsible for the entire Middle East, Africa, and Southwest Asia.  Egypt has the dubious distinction of having the largest number of Hepatitis-C cases in the world,  with 165,000 new diagnoses every year; avian flu and hoof and mouth disease remain significant problems; and the SARS variant Mers-nCoV virus, which has a 35-50 percent mortality rate, has recently appeared in Saudi Arabia, which, given the large number of Egyptians working and traveling to and from the Kingdom, represents a threat to public health in Egypt as well.

4.       Everyone—Americans, Egyptians, Israelis—recognize that the Sinai is a major problem.  Although it is not just a security problem, in the short run the United States can do some good in the Sinai through the expansion of the Multinational Force Observers that have been stationed in there since 1982 and working with both the Israelis and Egyptians on expanding their communication and intelligence cooperation.  Still, this is no panacea. Largely by design, the Egyptians are unable to operate effectively in the Sinai and the area will be a major political and economic development challenge over time.

These are all things that do not necessarily require significant outlays of U.S. money and they are all initiatives that the foreign policy bureaucracy should be able to accomplish.

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  • Posted by Timothy Neeno

    I am currently teaching in Egypt, and have worked in the Middle East for a number of years. I think the US should be extremely wary of making any loans with out clear conditions and checks to make sure that any money loaned goes where it is supposed to go. There are serious problems with corruption here at all levels, and any analysis that doesn’t take this into account is dangerously wrong. It is worth considering making any loans targeted to specific, well monitored programs.
    It is imperative for the US not to get tangled in partisan politics here, as it is far from clear who will be in charge a year from now, If that means not making any loans at all, so be it. What we should do is keep channels open to all the major factions: the military, the Muslim Brotherhood, the opposition bloc, etc., and make it clear that if Egypt collapses into chaos or a new dictatorship that no loans of any kind will be forthcoming.

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